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Data Suggests Retail’s Going the Wrong Way on Omnichannel

Nordstrom, DSW, Louis Vuitton, Bergdorf Goodman and Fabletics ranked in the top 20 percent of NewStore’s survey on the state of omnichannel in retail.

Omnichannel capabilities matter even more as retail recovers from the pandemic. However, a new study from the enterprise omnichannel platform provider reveals that many retailers have a long way to go in delivering experiences that meet consumer expectations—and if they don’t evolve, they’ll be leaving revenue and loyalty on the table.

NewStore’s 2022 Omnichannel Leadership Report showed that while brands and retailers significantly accelerated efforts to reach shoppers in new ways—from building out tools to spur digital engagement to adopting services like buy online, pick up in store (BOPIS) and training associates to provide more personalized service—they have work to do in establishing consistency. “As a result, there are a lot of fragmented experiences across the industry,” NewStore said. “This couldn’t be further from what customers expect, and from what brands know they need to deliver.”

NewStore assessed 250 luxury, premium, and lifestyle retail brands for the annual report, auditing their websites, mobile experiences, call centers and stores. Secret shoppers analyzed different retail touchpoints and services, and evaluated store associates on their ability to provide a seamless experience.

“A lot of the innovation we saw mid-pandemic consisted of solutions for what was needed at the time,” NewStore said, characterizing most brands’ efforts as “[q]uick fixes to check a box and satisfy a need.” Because retailers needed to get their products into the hands of homebound consumers, efforts to provide convenience and speed sometimes lacked efficiency. The capabilities were less than “fully baked” as a result, providing substandard experiences for shoppers.

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For example, when it comes to digital engagement, just 4 percent of brands offer self-checkout in their stores, up from 3 percent in fiscal 2021. Meanwhile, contactless payment solutions have lost ground, with 74 percent of retailers offering ways to check out without associate interaction, compared to 83 percent in fiscal 2021.

A little over half (53 percent) of retailers currently offer BOPIS options, up from 40 percent in fiscal 2021. Notably, store-to-door shipping has grown at a much higher rate, with 73 percent of brands offering the service compared to 46 percent earlier in the fiscal year. Ship-from-store helped retailers utilize store-based inventory during the pandemic’s sweeping brick-and-mortar closures.

And even though shoppers have headed back to brick-and-mortar stores, retailers appear to be pulling back on implementing tools that would help associates operate more efficiently. Just under half (48 percent) of brands surveyed give their associates mobile devices to help assist customers in store, down 20 percent from 2020, and only 19 percent of retailers said their associates are equipped to provide mobile checkout, down from 33 percent.

As the sector heads into another challenging season plagued by shipping delays and logistical challenges, lukewarm adoption of convenience-boosting measures just won’t cut it with consumers, NewStore said. “We’re at a tipping point and it is crunch time for brands to finally go all-in on omnichannel,” it added. “Consumers’ expectations are too high for features and functionality that aren’t intuitive to use or don’t align with their values.”

The National Retail Federation’s (NRF) data showing that sales are growing at a rate not seen in over 15 years underscores the urgent need to adopt customer-centric features. And after hundreds of store closures in 2020, many brands are taking advantage of deals on real estate in key markets in plotting brick-and-mortar expansion.

Despite the optimistic outlook, most brands are “meeting a minimum number of consumer expectations for omnichannel capabilities,” NewStore said. The majority (80 percent) racked up 50 percent or less of the points available on the scoring scale though top-scoring brands Nordstrom, DSW, Louis Vuitton, Bergdorf Goodman and Fabletics forged different paths to success.

NewStore said Nordstrom has managed to evolve into a true omnichannel retailer, and has successfully integrated its selling channels, from online to in-store and the Nordstrom app, where shoppers can access stylist help. The retailer has opened different types of retail locations, like its small-scale Nordstrom Local storefronts, as well as men’s and women’s-only locations. Meanwhile, DSW has poured tens of millions of dollars into enhancing omnichannel, rolling out curbside pickup, BOPIS, and self checkout from its mobile app.

As a preeminent luxury brand, Louis Vuitton streamlined its user experience across digital, mobile and brick-and-mortar. NewStore highlighted the French fashion house’s in-store experience as a point of excellence, noting that shoppers are paired with an associate upon walking through the door. Personalized attention is a centerpiece of the experience, and the company’s salesforce is equipped with mobile technology to help facilitate sales and show shoppers product options.

Bergdorf Goodman recently used a $500 million tech investment to build out premier services that offer personalization and fast delivery while optimizing its stores with technical features. The luxury retailer has upped the ante on its white-glove service with remote selling and clienteling solutions, while parent Neiman Marcus Group plans to acquire Stylyze, a cloud-based Software-as-a-Service platform that delivers enterprise solutions for fashion verticals.

Built as a digitally native DTC, Fabletics and its parent company, TechStyle, leverage a unique membership business model that relies heavily on consumer data to predict appetites and the success of trends. The platform’s more than 2 million “VIPs” can interact with the brand across multiple touchpoints, including an e-commerce site, an app, and retail locations. “At its foundation is a proprietary platform that bridges all core systems, making it easy to gain a 360-degree view of customers, inventory, and orders,” NewStore said.